Serbian authorities are turning toward other sources of gas and moving toward decreasing the country’s dependence on Russian monopolist Gazprom since the cancellation of the South Stream pipeline.
One example of this new stance came during the Munich Security Conference at the beginning of February, when Serbian Prime Minister Aleksandar Vucic met with US Vice-president Joseph Biden and Assistant US Secretary of State Victoria Nuland. They discussed the energy situation in the region and in Europe, a discussion the Serbian Prime Minister confirmed to the media in Belgrade several days ago this way:
“As a Prime Minister I must think of energy security and stability of Serbia in the future. I had a very serious talk with Mister Biden and Mrs. Nuland, and we talked about the energy situation in Europe. In my opinion, it would be best for us if we could have different sources competing so we can choose the best solution for our country."
One alternative gas source for Serbia might lead through Croatian island of Krk, after a terminal for natural liquid gas is opened there. Estimates for construction are that the infrastructure will take a year. A pipeline would run from that terminal in the northern Adriatic to Hungary, from which Serbia might get gas, but first it must ensure a connection with Hungary. That option was recently suggested by US Ambassador to Croatia Kenneth Herbert, who said that the US is counting on Serbia’s joining this pipeline project.
The export of liquid natural gas from the U.S.to Krk and to other Balkan countries was also mentioned by Cristopher Murphy, a Democratic US Senator, at the end of January. He said:
“There is potential export from the US that could be very successful. Of course, we must have capacities to deliver the gas to the Balkans, but a new terminal in Croatia, whose construction is being discussed, is a chance for the US to distribute the liquid natural gas to the region.”
In addition to that potential, an additional source could be gas from Azerbaijan, via the “South Corridor” pipeline from that country through Georgia, Turkey and Greece. One arm would go to Bulgaria, and Serbia could hook up through Bulgaria. That pipeline is not expected to be operational for three or four years.
In order to get gas from that operation, a pipeline would have to be built from Serbia to Bulgaria and Vucic met with Azerbaijani President Ilham Alyiev in Munich. Serbia’s Minister of Energy Aleksandar Antic has said that construction of a connection with neighboring countries, namely Bulgaria, will be one of the country’s important energy tasks.
Kovacevic: Alternative gas sources
However, Aleksandar Kovacevic warns that Serbia must make the most sensible use of outside sources. Kovacevic, a member of the Investigative Forum of the European Movement in Serbia and senior scientific associate of the Oxford Institute for Energy Studies (Solid and Fossil Fuels), argues that Serbia might reach other gas sources with relatively low investment costs. He says that the closest ones are in neighboring countries such as Romania:
“Romania is a significant gas producer, and it has large gas infrastructure, large underground storage facilities and pipelines. It also has its own production facilities and two connections to Ukraine, one to Hungary and one to Bulgaria. It continues to doresearch for additional gas production, so a connection to Romania could obviously bring us to one interesting gas market. Connecting with this country is very simple. In the early 2000s, documents of the World Bank noted we can connect to the Kikinda-Arad line, and probably at some other points, with the Romanian market.”
He recognized Bulgaria as an alternative source, noting that that country has excellent gas infrastructure. Even though it is rather small producer, Bulgaria has significant gas reserves on its part of Black Sea coastline, he says and adds:
“Connecting to Bulgaria also connects us to the infrastructure in Turkey and Greece – Bulgaria is already connected – where we have gas sources from Central Asia, such as Iran and Azerbaijan, and there are also terminals for liquid gas there, which means that gas from different sources can be bought there. Also, Turkey receives Russian gas through the existing pipeline under the Black Sea, so that is another alternative.”
The Croatian gas market, even though it is small, has a lot of interconnections – to Austria, Hungary and Italy, and it is very dynamic. According to Kovacevic, it could also be an alternative for Serbia. In that open market, gas from any country – the US, Canada, Qatar, Nigeria, Egypt or Algeria -- can be bought.
Kovacevic believes that for countries like Bulgaria and Serbia, cancellation of the ‘South Stream’ has positive aspects. He says:
“It is always good to have an open market instead of one big transit. Also, the financial and political expectations of those transit taxes [for South Stream] have been too high, obviously much higher than the project could support. In the end, that is why it was cancelled.”
Entering the open market, concludes Kovacevic, is beneficial for Serbia because when buying exclusively from Russia, the country was dependent on one buyer and there is no good economic solution when problems arise– the solution is always political.